• The Reserve Bank of India (RBI) has imposed a penalty on seven banks for delayed implementation of SWIFT-related operational controls.
• Earlier in February 2018 RBI had directed banks on time-bound implementation and strengthening of SWIFT-related operational controls following the ₹14,000-crore fraud in Punjab National Bank.
• The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.
• Established in 1973, SWIFT uses a standardized proprietary communications platform to facilitate the transmission of information about financial transactions.
• SWIFT neither holds funds on its own nor manages external client accounts.
• SWIFT is headquartered in Belgium.
• Prior to SWIFT, the only reliable means of message confirmation for international funds transfer was Telex. It was discontinued due to a range of issues such as low speed, security concerns, and a free message format.
Mains Paper 3: Science and Technology
Prelims level: SWIFT